Game-on digitally: developers’ earnings up 43 percent

NZ game developers reap $143m

The New Zealand Game Developers Association (NZGDA) has released the results of a study that, it says, found New Zealand’s game developers earned a record $143.0m in the year to 31 March 2018, a 43 percent increase on the prior year.

NZGDA says 93 percent of this revenue came from exports of digital creative entertainment software, and employment in the sector grew 10 percent to 550 full-time roles. The ten largest studios earned 94 percent of revenue and employed 81 percent of the total workforce.

Thirty one percent of employees are artists, 29 percent are programmers, 12 percent are in marketing or management, 10 percent are game designers, seven percent work in quality assurance and six percent are producers.

The survey found 63 percent of studios expecting more than 10 percent growth in the coming year. “This optimism is reinforced by several local game studios having announced further successes since the survey closed,” NZGDA said.

“Bloons Tower Defence 6 by West Auckland-based Ninja Kiwi became the number one paid app in the world, ranking above Minecraft, on both the Apple and Android app stores when it launched in June. Local studio Grinding Gear Games was acquired by the world’s largest games publisher Tencent for over $100m – one of the largest tech exits in New Zealand history.”

It added: “Those successes come from studios developing and exporting their own original game IP, rather than contracting for publishers or Hollywood studios. This continues to be the most profitable business model, making up 77 percent of the industry’s revenue – an increase on previous years. However, it requires more initial development and marketing investment which is lacking in the New Zealand ecosystem.”

Revenue from contract work (12 percent) and selling advertising in games (seven percent) has remained constant, but accounts for a smaller percentage of industry revenues as profits from original IP investments take off.

NZGDA chair, Michael Vermeulen said the ranks of industry leaders were not growing fast enough. “Since we’re competing in a global market New Zealand should have significantly more large studios. Our potential isn’t limited by New Zealand’s size,” he said.

Support for startup game businesses and ‘indie games’ is one of the issues being looked into by a report on interactive media and video games being undertaken by NZ Tech and the NZGDA with support from the Ministry of Business, Innovation and Employment.

Clare Curran, minister of broadcasting, communications and digital media, said a report on the results of the research would be released later this year.

“Part of the research will explore how the interactive media industry relates to government goals. The recommendations for government and industry could really help us work together to realise the potential of this fast-growing area,” she said.

“If we want game development to continue to grow in a sustainable way, we need to support the next generation of small game studios to scale-up.”

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